rethinking our economy: the impact of covid-19 on the ......gozo’sunderlying economic structure 5...

Rethinking our Economy: The Impact of

COVID-19 on the Gozitan economy and the

Way Forward

Daniel Borg

Chief Executive Officer

Standing Committee on Gozo Affairs – 16 September 2020

THE WAY FORWARD 2

“At the same time I hope that, with the converging commitment

of all political and economic leaders, work might resume:

families and society cannot continue without work . . . It is and

will be a problem in the aftermath of the pandemic: poverty

and lack of work. A lot of solidarity and creativity will be needed

to resolve this problem”

Pope Francis (2020), Angelus Saint Peter Square, Sunday 2 August 2020

GOZO’S UNDERLYING ECONOMIC STRUCTURE

3

GOZO’S UNDERLYING ECONOMIC STRUCTURE 4

64%

Employment

In 2018, 64% of the people in full-

time employment in Gozo were in

the private sector, while 36 % were

in the public sector

Business Units

60.3% of the business units in Gozo

employed between 1 to 9 persons

(2019)

64%

GDP per capita

GDP per capita in Gozo at Euro

15,997 is 64 % of the national

economy (2018)

60.3%

Upcoming Deposits

GOZO’S UNDERLYING ECONOMIC STRUCTURE 5

9.8%

Malta: 10.29%

7.5%

Malta: 3.5%

Contribution of Construction to

Gozo’s Regional GVA -Average Rate of Growth – GDP – Gozo

2014 - 2018

Tourism

Same day visitors (2019)

Foreign Inbound Tourists (2019)

Domestic Tourists (2019)

50%

215,272

180,979

1,346,550

8.9%

Malta: 4.6%

Contribution of Real Estate

Activities to Gozo’s Regional GVA -

Estimated Contribution of Gozo’ s GDP

CURRENT BUSINESS SENTIMENT

6

WHAT IS THE SECTOR IN WHICH YOU ARE OPERATING?

7

24% Tourism

18% Importing/Wholesaling/Retailing

18% Financial/Insurance/Legal/Health & other

Professional Services

11%

Manufacturing/

Exporting

7% Construction

5% Transport

2% Crafts

2% Agriculture/Fishing

13% Others

HOW HAS THE OUTBREAK OF THE COVID 19 AFFECTED GOZITAN BUSINESS?

8

6.70% 4.40%

20%22.20%

46.70%

1 (No Effect)

2

3

4

5 (Very

Negative)

THE IMPACT OF THE COVID 19 WAGE SUPPLEMENT ON GOZITAN BUSINESSES

9

57.80%

11.10%

31.10%

Positive

Negligible or

minimal impact

My business was

not entitled to

benefit from this

incentive

THE IMPACT OF THE RENT REFUND SCHEME ON GOZITAN BUSINESSES

10

22.20%

13.30%

64.40%

Positive

Negligible or

minimal impact

My business was

not entitled to

benefit from this

incentive

THE IMPACT OF THE ELECTRICITY BILL REFUND ON GOZITAN BUSINESSES

11

26.70%

33.30%

40.00%

Positive

Negligible or

minimal impact

My business was

not entitled to

benefit from this

incentive

THE IMPACT OF THE VOUCHER SCHEME ON GOZITAN BUSINESSES

12

35.60%

15.60%

48.90%

Positive

Negligible or

minimal impact

My business was

not entitled to

benefit from this

incentive

THE IMPACT OF THE OTHER MEASURES ANNOUNCED BY GOVERNMENT ON GOZITAN

BUSINESSES

13

25.00%

75.00%

Positive

Negligible or

minimal impact

WAY FORWARD 14

75.60%

42.20%

64.40%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

The COVID-19 Wage

Supplement should be

extended beyond the

month of October

The COVID-19 Wage

Supplement should be

reviewed to include

other categories of

workers

The Government should

issue another round of

vouchers in order to

stimulate the economy

WAY FORWARD

15

MAIN MEASURES BEING PROPOSED BY THE GBC 16

Transport and Connectivity

• Continue with important projects for Gozo

including enhancing further maritime and air

links between Gozo and Malta.

• Continuation of the permanent link project

between Gozo and Malta.

.

Public Infrastructure

• The building of a new hospital for Gozo.

• The building of an underground multi-storey

parking in Victoria that would not impinge on

Victoria’s historic and authentic landscape.

• The building of a new breakwater for Marsalforn

Harbour.

Sustainability

• Replace the present leased ferry with a hybrid ferry.

This should also be considered for the other Gozo

Channel vehicles as a long-term approach when coming

to replace the existing fleet.

• Electric vehicles of Maltese residents crossing over to

Gozo are to pay a reduced fare. On the other hand

Gozitan residents with electric vehicles would cross for

free on Gozo channel ferries.

• Refund on electric vehicles for Gozo residents to be

raised to € 9,000 instead of the present maximum of €

7,000.

.

Digital Sector

• Provide a tax holiday for companies in the digital

sector to establish themselves here in Gozo.

• Grant a subsidy on rent for companies in the digital

sector which establish themselves in the Digital

Innovation Hub.

• Creating an eco-system of incentives specific for

Gozo, for business enterprises within the wide

spectrum of the digital technology sector alongside a

holistic strategy for Gozo in this sector..

THANK

YOU